Capital Land Builders Pvt. Ltd. & Ors. v. M/s Shaheed Memorial Society & Ors.

SURENDER PAL R/o 14, Khijarabad Village Near New Friends Colony, New Delhi

7. SH.

SIDHARTH CHAUDHARY R/o 96, Anupam Appartment M.B Road, New Delhi

8. SMT.

SATYA CHAUDHARY R/o 111, Sector 15, Faridabad, Haryana

9. REGISTRAR OF COMPANIES IFCI Building Nehru Place, New Delhi

10. Sh. R.K SHAH Asst. Registrar of Companies IFCI Building Nehru Place, New Delhi

11.

REGISTRAR OF SOCIETIES 419, Functional Industrial Estate, Patpartganj Delhi...... Defendants Through: Mr. Ashish Mohan, Mr. Hem Kumar, Mr. Arjun Choudhary, Advocates for D-1 to D-6 Mr. Mayank Rustagi, Advocate for D-2 Mr. Vijay Joshi, Mr. Lalit Sharma, Advocate for D-9 to D-11 CORAM: HON'BLE MS.

JUSTICE NEENA BANSAL KRISHNA

JUDGMENT

NEENA BANSAL KRISHNA, J I.A. 465/2020

1. The defendants have filed an application under Order XII Rule 6 Digitally and Order XV Rule 2 read with Section 151 of the Code of Civil Procedure, 1908 dated 13.01.2020 seeking dismissal of the suit for mandatory injunction and damages, filed by the plaintiffs.

2. The plaintiffs by way of present suit, have sought permanent injunction for restraining the defendants nos. 1 to 8, their agents and employees from representing themselves and/or holding themselves out to be shareholders of the plaintiff’s Company or to act as their authorised representatives; for mandatory injunction for directing the defendants to handover the Letter Heads and other documents or instruments, stamps and seals bearing the name of plaintiff Company which have been created by them and for directing the defendant nos. 9 and 10 to remove their names from Form 32, Form 18, Form 2 and Form 5 and to take action against defendants nos. 1 to 8. The mandatory injunction is also sought against the defendant nos. 1 to 8 to disclose all the transactions, entered by them, in the name of plaintiff’s Company, details of all bank accounts opened by them in the name of the plaintiff company and to restrain them from appropriating or dealing with the assets of the company and to award damages.

3. The facts in brief are that the plaintiff, a Private Limited Company, incorporated in the year 1959 has the authorised capital of Rs. 25,00,000/divided into 25,000 equity shares of Rs. 100/- each. Its paid-up capital is Rs. 24,92,000/- divided into 24,920 equity shares of Rs. 100/-. At the time of its incorporation in the year 1959, it had a capital of Rs. 1500/comprising of 15 equity shares of face value of Rs. 100/-. Over a period of time, the share capital has increased as reflected in Form 2 dated 01.02.1998. Pursuant to the decision of the Board of Directors, in the Digitally meeting held on 28.09.1983 and on 20.01.1998, the Share Certificates issued earlier on incorporation of Company to shareholders were cancelled, withdrawn and replaced with new Share Certificates. The Annual Returns are being filed regularly by the plaintiff with Registrar of Companies (hereinafter referred to as “ROC”) with duly approved and audited balance sheets, Forms 2,18, 32 etc.

4. The defendant no. 1, a registered Society, founded by late Ch. Brahm Prakash and others became a shareholder of the plaintiff Company on 20.05.1962. Late Ch. Brahm Prakash acquired 500 shares having distinctive nos. 61-560 which was initially covered by a single Share Certificate. He transferred these shares to Shaheed Memorial Society, the defendant in the year 1963. Subsequently, additional 150 shares were allotted to the Society in the year 1983.

5. As per the reports of the plaintiff Company, the Society from time to time transferred all its shares and ceased to be a member of Plaintiff Company in 1989. The original Share Certificate covering 500 shares were subsequently cancelled and split into various certificates and various transfers were affected by the Society.

6. According to the information gathered by the plaintiff, the defendant no.1, Society became defunct and has not carried on any activity since the last 20 years. It has no address or telephone number or a bank account and no Returns have been filed in the office of Registrar of Societies after 2005. However, defendant nos. 2 to 8 now allege to be the members of the Governing Body of defendant no. 1 Society and defendant no. 7 alleges to be the Secretary. There are, however, dispute inter se the defendants as to who are in fact the office bearers and Digitally members of the society.

7. In June, 1997, Defendant no.1 Society through defendant no. 7, Mr. Siddhartha Chaudhry, as its Secretary filed a petition under Sections 108 and 111 (4) of the Companies Act, 1956 bearing Company petition NO. 15/III/97 before the Company Law Board, Northern Region Bench praying that 500 shares with distinctive numbers from 61-560 be restored in its name by the plaintiff (which was impleaded as respondent no. 1 in the Company petition). On 10.12.2004, the Company Law Board passed an Order directing the defendants to file affidavit of proof of existence of Society and its members as on date with addresses etc. Defendant no. 4 (Mr. Ajay Yadav) filed a Letter dated 26.05.2006 on a fabricated Letterhead of the Plaintiff Company and signed by him as Director of the Plaintiff Company showing the address of the Company as A/3, Indian Express Apartment, Mayur Kunj, New Delhi-96. The plaintiff never had its office at this address and the phone numbers given in the Letterhead were also wrong. It is further claimed that Mr. Ajay Yadav has never been a shareholder or a Director or an authorised representative of the plaintiff Company. Thereafter, the advocates for defendant no. 7 were permitted to withdraw the Company Petition and the same was dismissed. It is claimed that a total fraud was perpetrated by defendant nos. 1 to 8 and in particular by defendant nos. 2 and 4 before Company Law Board. A fabricated letter on behalf of the defendant no. 4 was presented before the Company Law Board in an attempt to obstruct and prevent Company Law Board from passing appropriate Orders.

8. Prior to this, sometime in February, 2006, the plaintiff received a Letter dated 03.02.2006 from defendant no. 10, the Assistant Registrar of Digitally Companies, seeking explanation within 10 days in respect of a complaint received from one of the shareholders of the Company. However, there was no accompanying complaint with the said letter other than a Letter dated 28.12.2005, signed by Mr. Ajay Chaudhry, defendant no. 2, on the Letterhead of “Shaheed Memorial Society” addressed to the plaintiff Company and not to the ROC requesting the Company to allow and inspect the Company’s Statutory Records as a member.

9. Similarly, letter dated 16.02.2006 was received from defendant NO. 10 under Section 234 (i) of the Companies Act, 1956 calling for the same information. The plaintiff in its Reply dated 20.02.2006 informed that complainant was not the shareholder of the Plaintiff Company and was not entitled to any information.

10. In early April, 2006, the plaintiff received information from the market that some persons were holding themselves out as Directors of the Company and were negotiating for the sale of some of the properties of the Company. The plaintiff issued public notices in the newspapers on 11.04.2006 warning the public at large.

11. In April, 2006, the plaintiff came to know that defendant no. 2, Mr. Ajay Chowdhry, had filed a Form 32 with the ROC signing it on behalf of defendant no. 1 and as its member stating that defendant nos. 3, 4, 5 and 6 have been appointed as Directors on 10.03.2006, while Plaintiff nos. 2, 3 and 4 have been removed as Directors. It is claimed that no meeting either of the Directors or of the Plaintiff Company was held on 10.03.2006 neither were defendants nos. 3 to 6 ever appointed as Directors nor plaintiff nos. 2 to 4 removed at any time. No extraordinary meeting of the Company was requisitioned or held on 10.03.2006. No notices under Digitally Section 284 Companies Act, 1956 were given to plaintiff nos. 2 to 4 relating to the alleged proposal.

12. Similar mischief was discovered as three Forms no. 2, 5 and 18 had also been filed stating that the Board had authorised the filing of the said Forms vide Resolution dated 18.03.2006, to falsify the Plaintiff Company’s record with the ROC. It is claimed that no meeting was held on 18.03.2006 nor 80 shares of face value Rs. 100/- having a total consideration of Rs. 8000/- were allotted nor was anybody was authorised to file the Form vide Resolution dated 18.03.2006. Form no. 2 was signed by Ms. Kusum Sehgal; Form no. 5 was Kumar Sharma and Form 18 was signed by Mr. Nitin Madan, who are total strangers to the Plaintiff Company. The plaintiffs immediately addressed a Letter dated 24.04.2006 to defendant no. 9 and the Plaintiff’s representatives personally visited defendant no. 9 on number of occasions and provided the detailed information about the Plaintiff Company’s Shareholders and Directorship. The plaintiff then received two letters from the office of defendant no. 10 dated 16.06.2006 and 22.06.2006. No proper action has been taken by defendant nos. 9 and 10 over the past 15 years.

13. It is claimed that defendant nos. 2 to 8 have been creating confusion, falsifying records with respect to the affairs of the Plaintiff Company with the sole purpose and intent to defraud and cheat the public at large. No action is being taken by defendant nos. 9 and 10. By illegally holding themselves out as Directors of the Plaintiff Company, the defendants nos. 2 to 8 have sought to put to sale various residential plots of land owned and developed by the Company. The plaintiff has filed a Digitally FIR dated 09.06.2006 with the SHO, Mansarovar Park though the defendant no. 2 has also filed a counter Complaint against the Company vide Criminal Writ Petition no. 180405/06 before this Court. Hence, the present suit has been filed for permanent/mandatory injunction and damages.

14. Defendant no. 1, M/s Shaheed Memorial Society and others in their Written Statement took the preliminary objection that it had filed petition before the Company Law Board under Section 111 (4) of the Companies Act against the illegal transfer of shares of defendant no. 1 in the Plaintiff Company to the various other parties which is pending final adjudication before the Company Law Board and the present suit is creating a stumbling block in the efforts on the part of defendant no. 1 to attain its claim to the shareholding in the Plaintiff Company. Aggrieved that despite being in possession of original Share Certificate bearing nos. 61 to 560, defendant no. 1, Society was not shown in the list of shareholders, Defendant no. 1 filed a petition before Company Law Board under Section 111 (4) of the Companies Act which is pending adjudication.

15. On merits, defendant no. 1 has denied the averments made in the suit in entirety. It has refuted the claim of the plaintiff that it was maintaining all the statutory records properly and can produce the same is patently false as all the records were destroyed in a fire in or around 1975. It is further denied that defendant no. 1 had transferred all its shares from time to time and has ceased to be a member of the Plaintiff Company since 1989. It is further denied that the original Share Certificate covering 500 shares was subsequently cancelled and spilt into various certificates. Digitally It is re-affirmed that defendant no. 1 has all throughout been the shareholder in the Plaintiff Company. It is also denied that defendant NO. 1, Society has not carried out any activity since last past 20 years or it is defunct. It is claimed that defendant no. 1 is fully functional and has been providing requisite information to the Registrar of Societies as required by law. It is denied that defendant nos. 2 to 8 are the duly appointed members of defendant no.1, Society and is being represented by defendant no. 7. It is further claimed that defendant no.2 by misrepresenting himself as office bearer of defendant no. 1 and in an endeavour to hijack defendant no.1, Society had withdrawn the petition before the Company Law Board in collusion with one, Ajay Yadav but the petition was subsequently restored. It is further stated that defendant nos. 3,4,[5] and 6 were never the members of defendant no. 1, Society and defendant no. 2 was the member of the defendant No.1 Society up till 10.11.2006 and was removed from the Society thereafter for his activities against the defendant no.1 Society. It is submitted that defendant no. 1 is not part of any illegal activity and the suit of the plaintiff is liable to be dismissed.

16. The defendant nos. 4, 5 and 6 in their amended written statement claimed that according to Form 32 and Letter dated 26.06.2006, it is established conclusively that the Directors of the Company are (i) Mr. Ajay Yadav (ii) Mr. Arjun Chowdhry (iii) Mr. Surender Pal (iv) Mr. Abdul Haq Farhan. The allegations made of fraudulent, fabrication are defamatory and the defendants reserve their right to take appropriate legal action. Furthermore, the allegations made in the suit are covered under Section 397 and 398 of the Companies Act, Digitally 1956 and by merely filing a civil suit, the real nature and character of the dispute or controversy cannot be changed and the suit is liable to be dismissed as it is maintainable only in Company Law Board. It is further claimed that the suit is not maintainable in its present form as it has been filed in the name of plaintiff no. 1 with plaintiff nos. 2 to 4 as its Directors but they have already ceased to be the Directors of plaintiff no. 1 since 10.03.2006. Plaintiff nos. 2 to 4 have not only falsely impersonated themselves to be the alleged Directors of plaintiff no. 1, but have also relied upon completely false averments and forged documents with the view to deliberately mislead the Court and with a malafide design to grab the movable and immovable properties belonging to the plaintiff no. 1. Moreover, the shareholders including defendant nos. 1 to 8 except defendant no. 7 have colluded with plaintiff nos. 2 to 4.

17. It is further claimed that the answering defendants have been provided with information by Indian Security Press, Nasik through RTI Act, 2005 that the Transfer Deeds on which reliance has been placed by the plaintiffs, are forged and fabricated documents. The Transfer Deeds allegedly dated 26.02.1968 have stamp of denomination of 50 paisa when it was for the first time, printed on 27.09.1979. Further, stamps of denomination of 25 paisa as affixed on the Transfer Deed dated 29.01.1974 was printed only in 1978. Likewise, the stamp of Rs. 2 fixed on the Transfer Deed was printed only on 13.03.1979 for the first time. Furthermore, the stamp duty to be affixed on Transfer Deeds allegedly made in the year 1968 and 1974, should have been 75 paisa for every Rs. 100/- value of the share. However, the plaintiffs have affixed stamp duty of 25 paisa for every Rs. 100 share value of the Transfer Deed which Digitally became applicable vide Notification No. S.O.198 (E) dated 16.03.976 and S.O.130 (E) dated 28.01.2004, issued by Ministry of Finance, Department of Revenue. Moreover, the plaintiffs have not placed on record any Transfer Deed in lieu of remaining 240 shares and additional 150 shares which were also issued in the name of defendant no. 1, Society. It clearly reflects that no shares of defendant no. 1 have ever been transferred and it continues to be a shareholder of plaintiff no. 1, Company and the suit is liable to be rejected under Order VII Rule 11 CPC.

18. Defendant nos. 9 and 10 have also filed a written statement taking a preliminary objection that they have been discharging their statutory functions and are immune from any action in terms of Section 235 A of the Companies Act, 1956 and there is no cause of action disclosed against them and all the averments made in the petition are denied.

19. Defendant nos. 1, 2, 3, 5 and 6 have filed the Application under Order XII Rule 6 CPC for dismissal of the suit. It is stated in the application that this Court vide Order dated 20.09.2007 observed as under: "There are number of other miscellaneous applications which are pending on record and part arguments on those applications have been heard today. During hearing on those applications it transpired that the main dispute between the parties is regarding 500 shares held by defendant no.1 which according to defendant no.1 were fraudulently got transferred in the names of other persons. The case of the plaintiffs is that the defendant no.1 had transferred its shareholdings of 500 shares of Rs.100 each by 1989 whereas the case of defendants no. 1 to 6 and 8 is that they never transferred their Digitally shareholding in favour of any person and according to these defendants the purported transfer is forged and fabricated. The record of plaintiff no.1 company is admittedly with the plaintiffs. The plaintiffs are, therefore, directed to produce the complete record of plaintiff no.1 company including the transfer deeds purported to had been signed on behalf of defendant no.1 transferring its shares in favour of third party. The position regarding transfer of shares by defendant no.1 in favour of third party should be stated on affidavit to be filed by the plaintiffs within four weeks. The original transfer deeds should also be filed along with the affidavit. List the case for further hearing on 18.12.2007."

20. Pursuant to the directions, the plaintiff no. 4 filed an Affidavit dated 11.12.2007 admitting that they were in possession of the original share Transfer Deeds relating to 260 shares only and the share transfer deeds in respect of remaining 240 shares were not available with them. Thereafter this Court passed an Order dated 18.12.2007 which reads as under: "Ms Chowdhary appearing on behalf of the defendants says that the affidavit does not comply with the directions of this Court contained in its order dated 20.09.2007. Mr Sawhnev. learned Senior counsel appearing on behalf of the plaintiffs says that the plaintiffs have filed photocopies of whatever documents were with them, and they do not have any other documents except those, the photocopy of which have been filed along with the affidavit. Mr Sawhney further says that the original of the said documents are in mutilated condition and he seeks permission of the Court to get the said documents laminated/bound so that when they are filed in the Court, the same are preserved. The permission as prayed for is granted. The plaintiffs are permitted to file the original document in sealed cover within a weeks time. In case the Digitally defendants are able to show that the plaintiffs have withheld any document from the Court despite directions contained in its order dated 20.09.2007, adverse inference could be drawn against the plaintiffs for withholding of such documents from the Court. The defendants are permitted to file their reply in response to the documents filed by the plaintiffs along with the affidavit filed pursuant to the order dated 20.09.2007."

21. It is claimed that the submissions on behalf of the plaintiff as recorded in above Order dated 18.12.2007 that 240 shares are not available with them constitutes an admission in terms of Section 58 of the Indian Evidence Act, 1872.

22. Thereafter on 07.01.2008, plaintiff placed on record the original share Transfer Deed in respect of 260 shares. It is claimed that the only mode for transfer of the shares of a Private Limited Company is through execution of share Transfer Deeds by the transferor in favour of the transferee in terms of Section 108 of the Companies Act, 1956. It is claimed that since plaintiff has not been able to produce the original share Transfer Deeds in respect of 240 shares, no other evidence is required to be led in respect of these 240 shares in terms of Section 91 of the Indian Evidence Act, 1872.

23. Moreover, the plaintiff has placed on record one document dated 28.02.1968 purporting to be share Transfer Deed for transfer of 150 shares from defendant no. 1, Society to Chowdhary Braham Prakash. This document is nothing but a sheet of typewritten paper and does not satisfy the requirements of Section 108 (1-A) of the Indian Companies Act, 1956 which requires the instrument of transfer to be in the prescribed Form 7B. Moreover, before it is signed for and on behalf of the transferor and Digitally before any entry is made in Form 7B, it is required to be presented to the prescribed authority being a person already in the service of the Government, who shall stamp or otherwise endorse thereon the date on which it is so presented. This document is therefore, invalid and a nullity in the eyes of law.

24. The plaintiffs have thus failed to produce the Share Transfer Deeds in respect of 240 shares and the document pertaining to transfer of 150 shares, is void. Admittedly, there is no dispute qua 390 shares which exclusively remained with defendant no. 1 and thus the present suit seeking injunction against defendant no. 1 from acting as a shareholder of plaintiff no. 1, Company is liable to be dismissed.

25. Learned counsel on behalf of the plaintiffs in his oral submissions has taken a preliminary objection that the defendant by way of present application is seeking rejection of the suit in respect of alleged transfer of 390 shares out of the 500 shares. It is settled principle of law that there cannot be any part rejection/dismissal of a suit as has been held by Hon’ble Supreme Court in Madhav Prasad Aggarwal and Anr. Vs. Axis Bank Ltd. & Anr. (2019) 7 SCC 158 & Sejal Glass Ltd. Vs. Navilan Merchants Pvt. Ltd. (2018) 11 SCC 780.

26. It is further asserted that there is no admission in the plaint as alleged. The perusal of the plaint itself would show that defendant no. 1 has not been reflected in the Register of Members Company as well as in the Annual Returns filed from time to time in the office of Registrar of Companies which is not denied by the defendants. It is prima facie evident from the Register of Members under Sections 150 and 164 of the Companies Act, 1956 that Defendant No.1 is not a Member of the Digitally Plaintiff Company. Till such time the defendant no. 1, Society is able to get its rights adjudicated in the separate suit bearing no. CS (OS) NO. 1451/2012, filed by it, it cannot act as a shareholder and a Director of the Plaintiff Company.

27. In fact in the present suit, various issues have been framed and the affidavit of the witnesses of the plaintiff has also been filed. Moreover, it is still in dispute whether defendant no.1, Society is lawfully represented by defendant no. 2, Mr. Ajay Chowdhary as he was never appointed as the President or Secretary of defendant no.1, Society and has no authority to represent defendant no.1. Moreover, FIR No. 476/2006 has been registered which reflects that the documents on the basis of which defendant no.2 is claiming to be the President of defendant no. 1, Society and has authority to represent the defendant no. 1 are forged and fabricated, in respect of which a specific issue has already been framed. Furthermore, there is no admission whatsoever in respect of 390 shares as alleged. All the 500 shares of defendant no. 1 stand transferred by defendant no.1 Society itself from time to time between the year 1968 to 1989 as has been explained in the plaint. There have been contentious issues which have been raised and there are no unequivocal or clear admissions made by the plaintiff and no order of dismissal can be made under Order XII Rule 6 of CPC.

28. It is further explained that as per the terms of Companies (Preservation and Disposal of Records) Rules, 1966 read with Notification dated 09.04.2003, in Schedule II there are 62 items mentioned with a column for the duration for which the record should be preserved. Point No. 62 of the said Notification states that records/ Digitally documents that are not mentioned in the 61 items of Schedule II should be preserved for three years only. Since share Transfer Deeds are not mentioned in any of the 61 items, the same was preserved only for three years. Plaintiff Company was under no obligation to maintain the share Transfer Deeds for more than three years. However, only after a great search of some of the records were found pertaining to transfer of 260 shares, and the same were submitted in the Court. Furthermore, the Transfer Deed alone is not the only evidence in respect of transfer of shares. The said transaction is more than 50 years old and there is no requirement under law to preserve the Transfer Deeds. The best evidence to show that the shares were transferred from time to time is the Register of Members and their Annual Returns filed by the Plaintiff Company from time to time under Section 159 of the Companies Act, 1956 in which the past and present members of the Company during a particular year is mentioned. The Annual Returns for the year 1968 to 1989 reflect the transfer of all the 500 shares including 390 shares. The annual returns and the Register of the Members of the Plaintiff Company is the complete evidence for the transfer of shares.

29. Furthermore, defendant no. 1, Society after a lapse of more than 30 years, had filed a petition before the Company Law Board bearing no. C.P. No. 15/111/1997 under Section 111(4) of the Companies Act, 1956 for rectification of the Register of Members, which was subsequently withdrawn though restored because of the internal disputes inter se the defendants, who was the authorised person to represent defendant no. 1. It is further stated that defendant nos. 2 and 3 namely, Mr. Ajay Chowdhry and Mr. Arjun Chowdhry have not filed any written statement. Defendant Digitally nos. 4, 5 and 6 have been impleaded for the limited purpose to show that they have been wrongly and illegally, at the behest of defendant nos. 2 and 3, have been claiming to have been appointed as Directors of the Plaintiff Company and had sold and executed Transfer Deeds in respect to properties of the Plaintiff Company by misrepresenting the public at large that they are Directors of the Plaintiff Company.

30. Learned counsel on behalf of the defendants has argued in support of the application that pursuant to two Orders of this Court, the Transfer Deeds have been produced only in respect of 260 shares out of the 500 shares on behalf of the plaintiff which have been found to be fraud and fabricated in respect of which FIR No. 158/2007 has already been registered. The plaintiff has not been able to produce any documents to show that defendant no. 1, who was admittedly holding 500 shares, has transferred them between 1968 to 1989. The suit of the plaintiff is therefore liable to be dismissed.

31. Submissions heard.

32. The plaintiff has filed the present suit for permanent/mandatory injunction for restraining defendant nos. 1 to 8, their agents, their representatives to claim themselves as shareholders of the Plaintiff Company and to act on its behalf.

33. It is an admitted fact that defendant no. 1, a registered Society which was founded by late Sh. Chowdhry Brahm Prakash and others became the shareholder of the Plaintiff Company on 20.05.1962 and they acquired 500 shares having distinctive numbers from 61 to 560, covered by a Single Share Certificate. There are specific averments made by the plaintiff in its plaint that these 500 shares were transferred by the Digitally defendant no. 1 Society from time to time between 1968 and 1986 and different share certificates were accordingly issued. The case of the plaintiff is that after transfer of the allotted 500 shares by defendant no.1, they have ceased to have any interest in the plaintiff Company. The defendants on the other hand, are contending that they continue to hold these 500 shares which have never been transferred. There is thus, a disputed fact about the ownership of 500 shares on which the respective rights of the parties rest.

34. It is on record that pursuant to directions of this Court vide Order dated 20.09.2007, the plaintiff was able to produce the share Transfer Deeds only in respect of 260 shares. It has been explained by the plaintiff that in terms of Schedule II of the Companies Act and the Notification dated 09.04.2003 the plaintiff Company was liable to maintain these documents i.e., share Transfer Deeds for a period of 3 years. The documents which were sought are more than 50 years old and the Plaintiff Company was not under an obligation to preserve the same. However, on making a search, it was able to recover transfer deeds in respect of 260 shares which have been placed on record.

35. The defendants however, are basing their assertions in this application on the ground that non-production of 240 shares amounts to an admission that they are in the name of the defendants. In so far as 260 shares are concerned, it is claimed that after these Transfer Deeds were placed on record, defendant nos. 4 to 6 had sent the same for determining their authentication to Indian Security Press, Nasik which has reported that these transfer deeds are forged and a FIR No. 158/2007 has also been registered. However, mere filing of FIR is not sufficient to conclude that Digitally the share Transfer Certificates are fabricated. It can be established only by evidence and there can be no summary conclusion drawn about them being fabricated documents.

36. Moreover, it has been rightly argued on behalf of Plaintiff that these are more than 30 years old documents to which there is a presumption of genuineness attached. Further, as argued on behalf of the plaintiff, an opportunity is required to be given to the plaintiff to prove the disputed facts about transfer of shares and there exist no admissions or clinching evidence requiring no proof to dismiss the suit of the plaintiff at the threshold. Significantly, the defendant no. 1 has also filed a counter suit bearing CS (OS) No. 1451/2012 claiming to be the owner of 500 shares of Plaintiff Company.

37. The defendant can seek rejection of the suit only if there are plain, unequivocal and unambiguous admissions made by the plaintiff. It was held by the Hon’ble Supreme Court in Himani Alloys Ltd. V. Tata Steel Ltd. (2011) 7 SCR 60 that Order XII Rule 6 is an enabling provision and the court has to exercise its judicial discretion after examination of facts and circumstances, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion should not be exercised to deny the valuable right of a defendant to contest. It is only when the admission is clear that it may be acted upon. Similar are the observations made in S.M. Asif Vs. Virender Kumar Bajaj (2015) 9 SCC 287, Hari Steel and General Industries Limited and Another Vs. Daljit Singh and Others (2019) 20 SCC 425, Jeevan Diesels and Electricals Digitally Limited Vs. Jasbir Singh Chadha (HUF) and Another (2010) 6 SCC 601.

38. The facts of the present case do not reflect that the suit is liable to be dismissed simply on account of non-production of share Transfer Deeds by the plaintiff, as has been claimed by the defendants. The proof of transfer of shares is not only the Transfer Deeds. The plaintiff has also relied upon the Annual Returns and the Register of Members submitted regularly with the Registrar of the Companies to prove that there has been the transfer of shares by defendant no. 1. Having made these assertions, it cannot be said that it has been conclusively shown from the plaint and the documents of the plaintiff that these shares have not been transferred by defendant no. 1. This is more so when defendant no. 1 has admitted that its name has wrongly not being reflected as a shareholder of the Plaintiff Company thereby prima facie admitting that it has not been shown as a shareholder of the Company. The circumstances in which its name has been deleted can be understood only after the evidence is led by both the parties.

39. In the case of Union of India Vs. Ibrahim Uddin and Anr. (2012) 8 SCC 148, it was observed that admissions made by a party though not conclusive is a decisive factor in a case unless the other parties successfully withdraws the same or proves it to be erroneous. The admission even if not conclusive, may operate as an estoppel. The law requires that an opportunity be given to the person who has made an admission under cross examination to tender his explanation and clarify the point of admission. It was further observed that the question which is needed to be considered is what weight is to be attached to an admission and for that purpose it is necessary to find out as to whether it is clear, Digitally unambiguous and a relevant piece of evidence and further it is proved in accordance with the provisions of the Evidence Act, 1872.

40. In the present case, merely non-production or alleged forged Transfer Deeds is not only the evidence on which the plaintiff has placed reliance. There is other evidence as already mentioned above and also admissions of the defendants about not being the shareholders of the Plaintiff Company which need to be explained and tested on anvil of cross examination.

41. There are averments made by the plaintiff which have been countered by the defendants. It cannot be said that there are any clear and unequivocal admissions on the part of the plaintiff which entails the dismissal of the suit. This application is without any merit and is hereby dismissed. Be listed before the Roster Bench on 25th July, 2023.

JUDGE JULY 10, 2023 Digitally